macbank at it again, page-6

Macquarie blasts Mesoblast

Stem cell therapy specialist Mesoblast's market cap of $2.1 billion tells you almost all you need to know about the hype surrounding this Australian biotech.

Far from adding to the hype, this week Macquarie published a detailed report with an “underperform” rating on the stock, and detailing five “red flags” for investors to take note of.

There was quite a bit of detail, but it boils down to this comment on Mesoblast:

“Unfortunately Mesoblast currently performs poorly on most metrics we use to assess biopharma risk. Perhaps most concerning for us is (i) the company not publishing any clinical data whatsoever, and (ii) the extent of post-hoc analysis of its phase II heart failure data. These concerns along others mentioned inside this paper mean we have difficultly explaining MSB's current $2 billion market capitalisation, especially given US based peers at a similar stage of development are valued at a fraction of this level.”

Stem cell or regenerative medicine is one of the areas that investors get particularly excited about because of its ability to cure a disease without apparent side effects. But Macquarie's comments about “post hoc analysis” needs to be taken seriously. It refers to analysis occurring after a study has failed to prove what it had originally set out to. You can make data say just about anything if you have enough of it



Read more: http://www.smh.com.au/business/a-biotech-bonanza-may-be-just-hype-20120921-26auh.html#ixzz275xFoCX6